Insurance Claim Terms Glossary | ACV, RCV, Umpire & More

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A B C D E F H I L M O P R S U W

Actual cash value (ACV): Replacement cost minus depreciation. Often the first payment under a replacement cost policy.
Additional living expense (ALE): Coverage for extra costs of living elsewhere while a damaged home is repaired, sometimes called loss of use.
Amount of loss: The dollar value of covered damage. This is the only question an appraisal panel decides.
Appraisal clause: The policy condition allowing either party to demand appraisal when they disagree on the amount of loss.
Appraisal award: The written decision signed by at least two of the three panel members setting the amount of loss.
Appraiser: The person each side selects to value the loss and work with the other appraiser and umpire.
Bad faith: A general term for an insurer’s unreasonable handling of a claim. In Utah it is usually analyzed under the implied covenant of good faith in the policy; a legal question for an attorney.
Coinsurance: A commercial policy condition that can reduce a claim payment if the property is insured for less than a required percentage of its value.
Coverage A: Dwelling coverage on a homeowners policy, the limit used to calculate percentage deductibles.
Coverage B: Other structures coverage, such as detached garages, sheds and fences.
Coverage C: Personal property, or contents, coverage.
Declarations page: The summary page of a policy listing limits, deductibles, endorsements and the policy period.
Depreciation: The reduction in value due to age, wear and condition, subtracted from replacement cost to find ACV.
Debris removal: Coverage for the cost of removing damaged property and debris after a covered loss, often subject to limits.
Earthquake endorsement: An addition to a property policy that covers earthquake damage, typically with a percentage deductible.
Endorsement: A written change to a policy that adds, removes or modifies coverage.
Estimate review: A line-by-line audit of an insurance estimate to identify missing items and pricing gaps.
Extended replacement cost: An endorsement that pays above the dwelling limit, by a set percentage, if rebuilding costs more than expected.
Fair rental value: Coverage for lost rent when a rental property can’t be occupied because of a covered loss.
First-party claim: A claim you make under your own insurance policy, as opposed to a claim against someone else’s policy.
Holdback: Recoverable depreciation withheld until repairs are completed, also called recoverable depreciation.
Ice dam: A ridge of ice at a roof’s edge that prevents melting snow from draining and can force water under shingles.
Impartial: Without bias toward either side. Many appraisal clauses require appraisers and umpires to be impartial or disinterested.
Line item: A single entry in an estimate describing a task or material, its quantity and its price.
Matching: The question of whether undamaged materials must be replaced so repairs match in color, texture and appearance.
Mitigation: Steps taken to prevent further damage after a loss, such as tarping or water extraction. Policies generally require it.
Ordinance or law coverage: Coverage for added costs of meeting current building codes when repairing or rebuilding.
Overhead and profit (O&P): A general contractor’s charge, often 10% and 10%, for coordinating multiple trades on a repair.
Percentage deductible: A deductible calculated as a percentage of the dwelling limit rather than a flat dollar amount.
Proof of loss: A sworn statement of the amount claimed, which an insurer may require within a set time after requesting it.
Public adjuster: A licensed professional who represents a policyholder in presenting and negotiating a claim for a fee.
Recoverable depreciation: Depreciation that can be recovered after repairs are completed under a replacement cost policy.
Replacement cost value (RCV): The cost to repair or replace damaged property with materials of like kind and quality, without deduction for depreciation.
Scope of loss: The full list of damaged items and repairs needed, before pricing.
Snow load: The weight of snow and ice on a roof, measured in pounds per square foot.
Square (roofing): 100 square feet of roof surface, the standard unit for roofing estimates.
Steep charge: An added labor charge for working on roofs above a certain pitch, often 7/12 or 8/12.
Supplement: A request to add missing items or costs to an insurance estimate after the initial settlement.
Surplus lines: Insurance written by carriers not licensed as standard insurers in a state, often for hard-to-place risks.
Umpire: The neutral third member of an appraisal panel who decides items the two appraisers can’t agree on.
Wildland-urban interface (WUI): Areas where homes meet or mix with undeveloped wildland vegetation, raising wildfire risk.